Provided by: European Central Bank
Official Release: Introductory Statement

The ECB held its key benchmark rate at 1%, a record low, and seems unlikely to unwind any more emergency lending measures as it grapples with the problem of dealing with Greece’s budget deficit. ECB President Trichet said that policy makers will wait for new growth and inflation forecasts in March before deciding when to begin withdrawing the measures used to combat the financial crisis. For the most part though, the ECB needs to take a hard line with Greece, making it clear that the country needs to get its fiscal house in order.

The Euro extended losses to the Dollar prior to the interest rate decision, breaking below the low we set on Monday near 1.3850. Following the decision the Euro declined to a fresh more than seven-month low at the 1.3815 level.

From the Release: "To sum up, the current key ECB interest rates remain appropriate. Taking into account all the information and analyses that have become available since our meeting on 14 January 2010, price developments are expected to remain subdued over the policy-relevant horizon. The latest information has also confirmed that euro area economic activity continued to expand around the turn of the year. Looking ahead, the Governing Council expects the euro area economy to grow at a moderate pace in 2010. The recovery process is likely to be uneven and the outlook remains subject to uncertainty. A cross-check of the outcome of the economic analysis with that of the monetary analysis confirms the assessment of low inflationary pressure over the medium term. All in all, we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. Medium to longer-term inflation expectations remain firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term."

Provided by: European Central Bank
Previous Release: Introductory Statement

Provided by: European Central Bank
Official Release: Introductory Statement

The European Central Bank held rate steady at 1%, while President Trichet delivered some signals that the ECB was heading for the exits in regards to its cheap long-term funding. The next Long Term Refinancing operation on December 16th will be the last and it will not be at a fixed 1%, as has been the case so far. Also, the ECB will end the 6-month refi operations at the end of March next year, another way it will be removing its extra liquidity measures. These measures will take away some of the cheap funding European banks have been getting and the response by investors was a knee-jerk reaction away from the Euro. 

The Euro, which had been climbing overnight, hit a new intra-day high, and close to a one-year high, following the ECB announcement, but fell back down during Trichet's question and answer session. One of the questions posed was regarding the US Dollar, and Trichet said that the ECB has an "important stake" in a strong greenback.

Provided by: European Central Bank
Official Release: Introductory Statement

The ECB held rates steady at 1% and ECB Preseident Trichet said officials will withdraw some of the emergency liquidity measures introduced to fight the recession as the economy recovers.  “The Governing Council will make sure that the extraordinary liquidity measures taken are phased out in a timely and gradual fashion and that the liquidity provided is absorbed in order to counter effectively any threat to price stability over the medium to longer term.” He gave no timeline for withdrawing these measures. The Euro moved higher in the wake of his comments but fell back down during the rest of NY morning trading.

Provided by: European Central Bank
Official Release: Introductory Statement

The ECB kept rates at their record low of 1% following the conclusion of today's meeting. ECB President Trichet said that rates were at an appropriate level and that inflation remains low giving the bank more leeway to keep rates at their low levels as the economy pulls out of recession. Expectations are for an increase in rates mid next year. ECB policy makers are concerned that raising rates earlier can jeopardize a recovery as lending conditions tighten. Fiscal stimulus is beginning to wane and unemployment continues to be high which will put headwinds in front of the recovery. There are also medium term factors that can hamper growth such as the balance sheets at financial and non-financial institutions.  

Provided by: European Central Bank
Official Release: Introductory Statement

The ECB held rates at 1%, their record low, and implied that they will keep monetary policy accommodative for some time even as indicators begin to point to a recovery. The ECB raised its outlook for economic growth, after Germany and France posted positive growth in the 2nd quarter.

From the Release: "To sum up, the information and analyses that have become available since our meeting on 6 August 2009 confirms the view of the Governing Council that the current key ECB interest rates remain appropriate. Annual HICP inflation was slightly negative in August. This reflects mainly the base effects of the strong rise in commodity prices in 2008. The return of HICP inflation to moderate positive rates is expected within the coming months. At the same time, the latest information supports our view that there are increasing signs of stabilisation in economic activity in the euro area and elsewhere. This is consistent with the expectation that the significant contraction in economic activity has come to an end and is now followed by a period of stabilisation and very gradual recovery."

Provided by: European Central Bank
Official Release: Introductory Statement

The ECB kept rates at 1%, saying that level was "appropriate" and that policy makers were "satisfied" with their asset-purchase program. The tone of ECB President Trichet's press conference was more upbeat than before, indicating that the economy may recover sooner than previously expected. Though the outlook in the Euro-zone is brightening and there are indications that the global recession may be bottoming out, the Euro-zone is still facing rising unemployment while consumer prices were down the biggest annual pace on record. ECB policy makers see the economy remaining weak the rest of the year, with growth expected sometime "next year." The bank has previously said positive growth fiures will come around mid-2010.  

Provided by: European Central Bank
Official Release: Introductory Statement

The European Central Bank kept the benchmark interest rate unchanged at a record-low 1.00%, as forecast. ECB President Jean-Claude Trichet signaled the ECB will maintain rates at this level for the coming months but did not rule out the option of further rate cuts, saying "we did not decide today that this was the lowest level we would attain under any circumstances." Regarding eurozone economic growth outlook, Trichet said "economic activity over the remainder of this year is expected to remain weak but should decline less strongly than was the case in the first quarter of 2009," adding that "looking ahead into next year, after a phase of stabilization, a phase of recovery is expected around mid-2010." Trichet said he expects inflation pressures to remain muted. "The fall of annual inflation rates reflects mainly temporary effects," he said, adding that "after a return to positive rates, we expect price developments to remain dampened over the horizon."  

Provided by: European Central Bank
Official Release: Introductory Statement

The ECB held rates steady at 1%m and did not announce any new plans to purchase assets beyond the 60 billion euro plan announced last month. They did lower their economic forecasts for growth for the Euro-zone this year, which is expected to fall around 4.6%. Growth they believe will still be negative in 2010 with a forecast for the economy to shrink 0.3%. 

From the Release: "In the view of the Governing Council, the risks to the economic outlook are balanced. On the positive side, there may be stronger than anticipated effects stemming from the extensive macroeconomic stimulus under way and from other policy measures taken. Confidence may also improve more quickly than currently expected. On the other hand, concerns remain relating to the following potential factors: a stronger impact on the real economy from the turmoil in financial markets, more unfavourable developments in labour markets, the intensification of protectionist pressures and, finally, adverse developments in the world economy stemming from a disorderly correction of global imbalances...

As the transmission of monetary policy works with lags, our policy action will progressively feed through to the economy in full. Hence, with all the measures taken, monetary policy will provide ongoing support for households and corporations. Once the macroeconomic environment improves, the Governing Council will ensure that the measures taken can be quickly unwound and the liquidity provided absorbed. Hence, any threat to price stability over the medium to longer term can be effectively countered in a timely fashion. As has been emphasised many times, the Governing Council will continue to ensure a firm anchoring of medium-term inflation expectations. Such anchoring is indispensable to supporting sustainable growth and employment and contributes to financial stability. Accordingly, we will continue to monitor very closely all developments over the period ahead."